US CEO-Worker Pay Gap Is Widest In Developed World

Not too long ago we solved the mystery of America's missing wage growth by pointing to the fact that wage growth for the country's "non-supervisory" workers was in fact headed in the wrong direction, while America's bosses were seeing their pay increase. We went on to note that with the correlation between consumer spending and wage growth now nearly perfect, the US economy could well suffer given that non-supervisory workers account for four-fifths of total employment and consumer spending accounts for three fourths of GDP.

If you needed further evidence of the disparity in compensation for America's bosses versus what everyone else makes, look no further than the following chart from Bloomberg which shows that the pay gap between CEOs and workers is wider in America than in any other country in the developed world — and wider by a lot.

The CEOs of 350 Standard & Poor’s 500 companies made 331 times more than their employees in 2013, up from a ratio of 46-to-1 in 1983, according to the AFL-CIO. That’s more than twice the gap in Switzerland and Germany, and about 10 times bigger than in Austria. In Japan, CEOs make about 67 times more than workers (although the country’s highest-paid woman earns only 25 times more). Australian CEOs get 93 times more. A global Harvard Business School survey found that most people think pay gaps are far smaller than they are. That was particularly true in the U.S., where survey respondents thought the ratio of CEO to average worker pay was 30 to 1; they put the ideal ratio at 7 to 1.